Producer accuses Clintons of 'looting'

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A Hollywood producer who sought to hire President Clinton as a "rainmaker" has told a California court the former president and his wife, Sen. Hillary Rodham Clinton, cheated him out of a multimillion-dollar Internet venture and he wants his money back.

In a complaint to be heard today in Superior Court in Los Angeles, Peter F. Paul says the scheme was orchestrated by Mrs. Clinton, who convinced him to spend $1.9 million on campaign fundraisers prior to her November 2000 election to the Senate and then reneged on promises to help him on the Internet deal.

The 43-page complaint, which also accuses Mr. Clinton and others involved in Mrs. Clinton's "New York Senate 2000" campaign of taking part in the conspiracy, seeks $30 million in stock losses and $1.9 million in cash. The complaint is part of a pending lawsuit against Mr. Clinton and will be heard by Superior Court Judge Aurelio N. Munoz.

In a telephone interview from his California home, Paul, a convicted felon, said the Clintons "looted" his business to generate the largest contribution to Mrs. Clinton's 2000 Senate campaign in New York. Describing himself as a "disgruntled business associate" and not a "disgruntled contributor," he said the Clintons reneged on promises they made that Mr. Clinton would work with him after he left the White House.

He said he was "cajoled and then coerced" by Mr. Clinton as "an erstwhile future business partner" to make expenditures to benefit the president and his wife.

Paul produced and underwrote an August 2000 fundraiser called the "Gala Hollywood Farewell Salute to President William Jefferson Clinton," attended by numerous celebrities, including John Travolta, Brad Pitt, Whoopi Goldberg, Patrick Swayze, Michael Bolton, Diana Ross, Patti LaBelle and Melissa Etheridge.

Money raised at the all-star event went to Mrs. Clinton's successful campaign.

The Clintons' attorney, David Kendall, did not return calls for comment.

In January, the Federal Election Commission (FEC) said Mrs. Clinton's campaign committee, New York Senate 2000, underreported the cash it received from the gala. The committee agreed to pay a $35,000 fine. The committee also agreed to amend public reports to show that Paul's share of production costs for the gala were understated by $721,895.

The FEC ruling came after a four-year investigation and a separate Justice Department probe. An FBI affidavit in the case said costs of the August 2000 gala actually exceeded $1.2 million, but required FEC disclosure forms "incorrectly disclosed that the cost of the event was only $523,000."

The affidavit said the true cost of the event was "deliberately understated" to increase the amount of funds available to the Clinton campaign. Mrs. Clinton's campaign treasurer, Andrew Grossman, admitted in December he filed false FEC reports to hide more than $720,000 in Paul's contributions.

According to the lawsuit against Mr. Clinton, Paul said the former president agreed to work with him after leaving office as a "rainmaker" for Stan Lee Media Inc., a company Paul founded with "Spider-Man" creator Stan Lee. The suit said the deal involved $10 million in stock, $5 million in cash and a $1 million donation to the ex-president's foundation.

The deal, according to the suit, was based on a pledge by Paul to produce and underwrite the largest fundraiser of Mrs. Clinton's 2000 campaign. Stan Lee Media, which held the rights to Spider-Man, the Incredible Hulk and other comic book characters, was a publicly traded company with a market capitalization of $350 million.

The suit accuses Mr. Clinton of fraud and deceit in diverting a key investment away from Paul's company, causing it to fail and ending any chance for the $200 million Internet business to move forward. Also named in the suit are Mrs. Clinton's former campaign-finance director, David Rosen, and James Levin, a close friend of Mr. Clinton tagged by the former president as his agent to work with Paul.

Trial in the suit is set for March.

The complaint details what Paul said was Mrs. Clinton's role in convincing him to contribute cash to her campaign and to support misleading pre-election statements she made saying she would accept no money from him and that he had not donated to her campaign.

After the November 2000 election, Paul said Mr. Clinton went into business with Paul's Japanese partner and largest investor, Tendo Oto, president of Venture Soft of Japan. He said Mr. Clinton used "the trappings of the White House" to interfere in a $5 million investment promised to him by Mr. Oto.

The complaint said Stan Lee Media collapsed when Mr. Oto was convinced by Mr. Clinton to renege on his investment promise.

In 2004, the Clintons lost an appeal to the California Supreme Court to have Paul's suit dismissed, but Mrs. Clinton was removed as a co-defendant. Mrs. Clinton remains as a material witness and co-conspirator in the suit, and Judge Munoz has said she can not avoid testifying.

Paul pleaded guilty last year to one count of violating Securities and Exchange Commission regulations in manipulating the price of Stan Lee stock to save the company. In the late 1970s, he pleaded guilty to conspiring to defraud the Cuban government of $8.75 million in a black-market coffee transaction. In the 1980s, he pleaded guilty to possessing cocaine with intent to distribute and spent 40 months in prison.